Tuesday, September 9, 2008

Takeover of a majority stake in RSA's Denel Munitions a done deal

09/04/2008

Takeover of a majority stake in RSA's Denel Munitions a done deal

The acquisition, announced on 8 February 2008, of the takeover of a majority stake in South Africa's Denel Munitions (Pty) Ltd of Pretoria by the Düsseldorf-based Rheinmetall Group, now comes into effect following approval by the antitrust authorities and prior fulfilment of the terms of the agreement. The company will henceforth be known as Rheinmetall Denel Munition (Pty) Ltd.

Rheinmetall Defence has thus acquired a 51% stake in Denel Munitions, a company which emerged from the state-owned defence equipment contractor Denel (Pty) Ltd, where it constituted the latter's Munitions division. The remaining 49% share stays with the present holding company, Denel (Pty) Ltd of Pretoria.

With this acquisition, which is associated with a long-range supply program for the South African armed forces, the Rheinmetall Group continues to grow and internationalize its defence business, enhancing its market presence while underscoring its position as a global leader in the field of weapons, ammunition and propellants. At the same time, the deal will enable the Group to access new, strategically significant markets.

Rheinmetall is a premium supplier of weapons and ammunition for armour, artillery and infantry, and is also a leading maker of propellants. Among other things, Rheinmetall Denel Munition commands special expertise in artillery, mortar and infantry systems as well as plant engineering. Annual sales of weapons, ammunition and propellants by Rheinmetall amount to approximately US$ 1 billion; Denel Munitions’ sales equate to roughly a tenth of this figure.

Whereas the bulk of Rheinmetall Defence’s business is transacted with NATO countries, Denel Munitions’ markets include South Africa, Asia, the Middle East and South America. In future, Rheinmetall and its new South African subsidiary will market their expanded joint product portfolio in their respective key markets.